Walmart is launching a TV advertising campaign touting its Straight Talk prepaid wireless service, promising savings of up to $850 per year. The advertising effort likely will bring even more attention, and perhaps pricing pressure, to the flat-rate, no-contract segment of the wireless industry.
Walmart has been offering Straight Talk service from American Movil subsidiary Tracfone Wireless Inc. since last fall. Now that the nation’s largest retailer has seen how the product performs, it is ready to draw more attention to the effort, said Walmart spokeswoman Melissa O’Brien. The advertisements, which feature families outdoors, are designed to appeal to value-conscious mothers, O’Brien said. While Walmart doesn’t release any numbers on any of the products it sells, the Straight Talk offering has exceeded the retailer’s expectations, O’Brien noted. The advertisements do hint at some numbers with this phrase: “Join the over a million who have switched,” according to the ad, posted on Adage.com.
Verizon Wireless, which hosts the Straight Talk service, noted in its first-quarter financial results that it added around 1 million customers to its network through its wholesale partners.
Walmart’s Straight Talk initiative is different from its other wireless offerings for a number of reasons. First, the agreement is exclusive between Tracfone and Walmart. Even more surprisingly, the effort marks the first time Verizon Wireless has allowed a prepaid company to use its name in marketing efforts. However, the Verizon name is not mentioned in the TV advertisements.
Straight Talk offers unlimited calling, messaging and some data usage for $45 per month. The price undercuts most unlimited calling offers.
When Tracfone announced Straight Talk last year, Current Analysis assessed the product offering this way: “Straight Talk is still an unknown brand, which will limit its appeal. Not until it is largely proven and pushed in the media, virally and through first-hand satisfaction, will Straight Talk see any accelerated adoption.”
It seems Walmart’s decision to highlight the product through a TV advertising campaign is likely to bring it the media push Current Analysis said was needed.
Straight Talk is offered on a handful of LG and Samsung handsets at Walmart, ranging from $30 to $129. Walmart continues to sell other prepaid offerings from other competitors, O’Brien noted, adding that customers who are near the end of their contracts can compare a variety of pricing options and plans at Walmart.